What Happens to Our Debt When We Die?

[Gone4Good]

Quote:

Originally Posted by sridhga But why does one need a credit card in retirement?

$500 cash back.

[Nords]

Quote:

Originally Posted by sridhga But why does one need a credit card in retirement? Why do banks issue credit cards to retirees?

Because we don't want to carry cash, we don't want to deal with the hassles of debit-card theft/fraud, and the banks make a lot of transaction fees off our use of the credit card.

[Rustic23]

We pay no fees on our credit card. We get cash back/reward for it's use. If all merchants would give me a break for using cash, check or debit card, without a hassle, I would not use the credit card.

On the flip side, many retirees get their money on a monthly basis, pension payouts, SS and periodic withdrawals from savings. I see no difference in this and getting a pay check on a regular basis, with regards to how one would us their credit card.

[mickeyd]

Quote:

Originally Posted by sridhga But why does one need a credit card in retirement? I thought a credit card is a loan given by the bank to someone who is working so that he can get on with his monthly expenses and repay them presumably with the next paycheck. Essentially it is a bridge loan between paychecks. But aren't retired people supposed to be living on their life savings? They are not active earners to really repay this. Why do banks issue credit cards to retirees?

Most retirees received their credit card prior to retiring and banks have no reason to cancel them just because the cardholder has changed employment status.

Many retirees use the card, not as a "credit" card, but as a "charge" card, and pay off monthly balances, collect cashback bonuses, delay paying for purchases from 30 to 60 days after the purchase with no regard to paycheck receipt. It may be a kind of magic.

[Rambler]

Quote:

Originally Posted by sridhga But why does one need a credit card in retirement? I thought a credit card is a loan given by the bank to someone who is working so that he can get on with his monthly expenses and repay them presumably with the next paycheck. Essentially it is a bridge loan between paychecks. But aren't retired people supposed to be living on their life savings? They are not active earners to really repay this. Why do banks issue credit cards to retirees?

Ever try to rent a car without a CC? I hear it doesn't work. Buy stuff online? Airline tickets? iTunes? Apps? A lot of cell phones use CCs for pmt...etc. Most of us here would be paying them off every month (I haven't paid a finance charge on a CC in nearly 20 years, still in my 20s, and for something that was major, necessary, and needed right away). So, they are used primarily for convenience (for the folks here) not for financing.

R

[JustCurious]

Quote:

Originally Posted by RonBoyd Dying with debt: A dirty little retirement secret 40%?!?!?! Wow! On the other hand, how did they pick this survey group?

The group is a representative sample of the population as a whole. According to the most recent EBRI retirement confidence survey, 48% of people over the age of 55 have less than $50,000 saved for retirement.

http://www.ebri.org/pdf/surveys/rcs/...RCS-10_Age.pdf

[retiredtuna1]

What happened to honesty & a willingness to be responsible for one's own debts? is there a link between this and the current financial mess which the U.S. is in?

[skyvue]

Quote:

Originally Posted by Rambler Ever try to rent a car without a CC? I hear it doesn't work. Buy stuff online? Airline tickets? iTunes? Apps? A lot of cell phones use CCs for pmt...etc. Most of us here would be paying them off every month (I haven't paid a finance charge on a CC in nearly 20 years, still in my 20s, and for something that was major, necessary, and needed right away). So, they are used primarily for convenience (for the folks here) not for financing. R

I get the point but one could use your debit card for all this and get by just fine without a credit card. I have several credit cards but only use them once or twice per year just so they will not close my accounts. I keep them because there is about $75K in available open credit on them. I look at them as a backup emergency fund should something catastrophic happen. I suspect many seniors who blow through their cash quicker than expected, begin using their open credit for daily living expenses rather than more severly cutback on the lifestyle.

[RonBoyd]

Quote:

Originally Posted by skyvue I get the point but one could use your debit card for all this and get by just fine without a credit card.

Ah, yes. The Debit Card; the same thing as a Credit Card... without the safety and convenience. However, both are so "last century."

Customers pay by swiping smartphones, not credit cards

[ERD50]

Quote:

Originally Posted by retiredtuna1 What happened to honesty & a willingness to be responsible for one's own debts? is there a link between this and the current financial mess which the U.S. is in?

What they are doing is completely honest and responsible. The CC cos write the contract this way, and these people are following the contract. It is unsecured debt after all.

Though I understand what you are saying on an emotional level. But it is really the CC companies that we should be questioning. I'm sure it is a balancing act - they lose some money this way, but the people who run balances are paying fees. I don't think any CCs have gone out of business lately, they must know what they are doing.

Hmmmm, I wonder if a CC co could start a business with a secured CC? Say, tied to an account or something, and you need to hold a min balance in that account. They should be able to offer better rates. OTOH, they likely wouldn't be making money from late charges and interest on that group, so maybe it is a negative overall.

-ERD50

[M Paquette]

Quote:

Originally Posted by retiredtuna1 What happened to honesty & a willingness to be responsible for one's own debts? is there a link between this and the current financial mess which the U.S. is in?

Hmm. There's a story idea lurking in there.

Dead and in debt? No rest for the indebted! A collection agency gets rights to the... remains to reanimate and work off the debt. Now, spin it as a zombie yarn, or offend the transhumanists by treating an uploaded mind as property?